Australia's biggest rail freight operator, Pacific National, has issued a scathing report on the troubled $440million Murray Basin Rail project.

In its latest Status Report on the project, Pacific National estimated inadequate design and construction meant a maximum of only nine trains a week could operate on the Murray Basin network.

"Given the promised project benefits, this number should have been at least 40 a week," a status report, written by PN staff found.

"Given the number of deficiencies, it's clear the network, in its current state, will not come anyway near delivering the originally promised benefits.

"Even in a moderate grain harvest, the network is incapable of transporting grain in the volumes required."

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The project was intended to upgrade lines to 21-tonne axle loading (TAL), to provide an immediate 15 per cent productivity improvement.

Average grain train payloads were expected to increase to 2500 tonnes, per train, allowing for an extra 500,000 tonnes of grain to be transported by rail, each year.

The Pacific National report found V/Lines Design Standard classified the use of 80 lb-per-yard rail from the early 1900s as a "legacy" rail size.

It was therefore only suitable for lower standard, Class 4 and Class 5 track

"V/Line's Design Standard places limits on Class 4 and 5 tracks to 65 km/h and 40 km/h, respectively," the report found.

"Because of the legacy/vintage light rail used by the project, the type of locomotives is severely restricted."

The rail weight and construction used on the project was only suitable for inefficient locomotives, made in the 1960s.

"The locos can travel at up 65 kilometres an hour, but can only haul 355 tonnes," the report found.

In contrast, modern, high-powered locomotives could haul 1,450 tonnes.

"Modern locomotives can only be used at very slow speeds (if at all) on the new network because they are heavier and more likely to damage the legacy rail with their additional tractive capability. "

There was also an issue with wagon wheels, with the "uncommon" diameter of 920mm the only configuration able to achieve the 21 TAL.

"The wheel diameter of 840mm, used by most rail freight operators, only achieves 19-tonne axle-load on the old 80 lb rail," the report found.

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Speed restrictionsThere were currently 21 speed restrictions in place on the Murray Basin rail network.

The removal of passing loops was also restricting the amount of freight that could be moved.

"Speed restrictions and single line operations limit the number of freight trains that can use the network daily and restricts the amount of freight that can be moved on the line," the report found.

"Slow travel times require additional crews to ensure that employees do not exceed their maximum allowable driving hours due to fatigue management.

"Using additional crews incurs extra costs and limits the number of available crews to operate other trains."

The project also removed 13.5 kilometres of sidings.

"These sidings were previously used to park/stage trains and to allow trains travelling in opposite directions to pass each other," PN found.

"Fewer trains are now able to use the network because trains are unable to pass each other and have to wait for other trains to exit the section of line before they can enter.

"This limits the amount of freight that can be moved on the network."

Concerns confirmedSenior Victorian rail freight executives confirmed the use of smaller diameter wagon wheels had led to tonnage and speed restrictions.

Speaking at Melbourne's Rail Freight Alliance conference, consultant Ken Wakefield said no trains, carrying 21 tonnes axle loading were currently operating on the line, because of restrictions between Ararat and Maryborough.

There had been a dramatic increase in the time taken to get to port, for Merbein based rail and road freight company Seaway, since the completion of stages one and two of the project.

"It's around 15 hours to the port," Mr Wakefield told the conference.

"Before they started work on the project, going through Ballarat, they were averaging 11 hours."

Freight Victoria's Andrew Newman agreed.

"That is true, and we are aware of the challenge there with the wheel width," Mr Newman said.

The government's Intermodal manager Andrew Henderson agreed that since the completion of stages one and two of the project, the amount of tonnage being carried on the line had been reduced.

"The train from Merbein is running on 840 diameter wheels and it's had to go from 20 TAL, (Seaway) was running before Murray Basin, to 19 tonne," Mr Henderson told the conference.

"On the other hand, some of the grain wagons have 930mm wheels and 20.5 TAL, (so) they are actually achieving the 15 per cent.

"Obviously that is not the whole fleet, but those wagons are there and they are doing the job."

He said it was hoped more wagons, with larger diameter wheels, would be be able to be used on the MRBP.

"As part of the closeout of the Murray Basin Project, there are other options that are being looked at," he said.

"The minister is well aware of the axle load issues."

But Mr Wakefield said he believed there was only one train set - 60 wagons and two locomotives - capable of being carrying the higher tonnages.

Mr Wakfield said operators would now have to wait until the new business case was completed and the state government went back to its Federal counterparts.

"The Feds provide that money, the state matches that money, and we are back in business," he said.

"The state government hasn't got enough money to change it."

Pacific National's claims follow the RFA's "fail" report card on the government's delivery of the project.

Chairman, Councillor Glenn Milne said the RFA assessed the scope, issues to be addressed and proposed benefits of the project.

"The government has completely failed in the promised delivery and outcomes of this significant project," Cr Milne said.

"What is now abundantly clear is that the MBRP Region is worse now than before the project started."

A state government spokesman said the project was about enhancing access and competition for Victoria's freight network.

"It's already delivering better, more efficient freight services," the spokesman said.

"We are focused on ensuring lines are prepared for the upcoming harvest - because we know how important Murray Basin Rail is for farmers and the freight industry."